There was much hype and hoopla at the recent New Zealand Petroleum Conference about the extent of New Zealand's potential oil and gas reserves. Chris Uruski, a GNS scientist told Chris Laidlaw on Radio NZ's Sunday that we potentially have 20 billion barrels of oil equivalent in New Zealand's offshore exclusive economic zone. He did however put something of a dampener on the excitement by stating "we haven't really got anything sorted on a scientific basis" as to the extent of our oil reserves.
20 billion barrels sounds like one hell of a lot of oil -- but let's put that in perspective. The world currently uses around 84 million barrels of oil per day. Adding 1 billion barrels to global oil resources would delay the peaking of global oil production by just 4.7 days, according to a comprehensive 200 page study on global oil depletion by the United Kingdom Energy Research Council. Lets put aside the huge environmental issues. Lets ignore the difficulties of attracting investment in NZ oil exploration in the midst of a global financial crisis - (Exxon Mobil have just withdrawn from the Great South Basin). Lets be charitable and imagine that more oil is discovered…
Even if New Zealand was to find 20 billion barrels offshore, this would delay the onset of a global peak in oil production by only 94 days -- or just three months.
So what are the perceived benefits of finding more oil off New Zealand's coast? Dr. Peter Crabtree of the Ministry of Economic Development in his address to the Petroleum Conference outlined just three benefits -- high wage jobs, profit for New Zealand shareholders and government royalty payments. You will note that increased oil supply security for New Zealand, and insulating New Zealand from higher oil prices, were not included as perceived benefits of finding more oil in New Zealand.
The harsh reality is that finding more oil off New Zealand's coast will not make us immune from the coming oil shocks, oil shortages, higher prices and profound and devastating effects on our economy, which a growing consensus of opinion says will be hitting us in less than five years.